Costs of Political Intermediation and Sustainability of the European Social Model in Health Care: the Dutch Example

2. The Unsustainable Political Management of the Italian Health Care System 

In Europe but especially in Italy when it comes to welfare the most difficult policies to discuss in a non-stereotyped way are those relating to healthcare. This is because the matter is objectively complex, and the resolution of conflicts concerns not just choosing among different interests and values, but first requires a proper setting out of the dilemmas and secondly the identification, sometimes counterintuitive, of the most useful tools for achieving the intended purposes. As already mentioned, it is inappropriate to reduce such reflections to the guidelines within which other social policies are debated. For years this debate has been hostage to a primitive political sketch, in which each vested interest and pressure group has developed an almost diabolical capability for presenting its own particular point of view as the one representing public interest. This applies to professional politicians, political parties, political consultants, politically appointed administrators, bureaucrats, trade-unions, medical and paramedical professionals and their sub-groups, entrepreneurial or cooperative organisations, players variously qualifiable as non-profit organisations, religious or profiteering-religious bodies. This game comes out easily considering that in some ways the subject is a difficult one. Any non-trivial discussion concerning it requires the counterpart to pay serious attention that goes well beyond the two/three minutes attention span that the average TV viewer is ready to apply before grabbing the remote control to find something more relaxing, or that comforts him in confirming his/her acquired platitudes. Most viewers may also search for something that reassures them that they are already equipped with sufficient necessary information to navigate the various political-ideological ideas on offer.
If this is the state of an average citizen who has no immediate need of health care services, health care users — call them patients or customers — when at their weakest, with very little information are completely in the hands of others in times of need. They naturally tend to form an opinion only through the interpretative filter provided by the individual health care operators, from among those with whom they come into contact and with whom they establish a higher level of syntony and empathy. Usually they have no clear idea of the overall way the system works, and above all of its costs and relative effectiveness or ineffectiveness, efficiency or inefficiency in relation to costs.
Often, however, their immediate interlocutors have no idea, of costs and sustainability either. European social systems are based on the principle according to which all actual health care needs must be met — a sacrosanct principle and one to be defended and implemented to the letter. In some countries health care is an absolute right, enshrined in the constitution. Fulfilment of this principle, however does not fall from the heavens above. With the exception of those required to provide financial resources and those required to provide health care within the limits of their budget, every player in the health care sector tends either to ignore or to widely underestimate the problem of costs and long-term, and often not only long-term, sustainability.
What economists call “moral hazard” is not only the attitude most people display, usually with little or no subjective awareness, when they tend to exploit, even beyond their real needs and advantages, all services provided free of charge, but it is also an attitude widely shared by those who directly provide these services. This occurs when, as often happens, they are not aware of the costs, nor of the fact that the resources needed are always, by definition, limited and always inevitably inadequate to meet needs.
The current stereotyped and dull debate, in Italy, but not only there, often seems to suggest that there are basically only two alternatives up for discussion. On the one hand there is privatisation of health care, identified tout court with the almost total deregulation seen in the American model, and, on the other, the all-out defence of the existing system, with the exception of a few shareable but marginal ideas for patching it up1.
And yet there are objective reasons that will impose, and are in fact already imposing, changes that, if not properly managed, will very soon result in a progressive collapse of the current system. These are the change in living and working conditions that have taken place over the last few decades, the consequent rise of hard to satisfy expectations, technological progress — that everyone expects to be supplied as soon as available —, increased life expectancy — partly a consequence of improved technology but also involving a further inevitable rise in costs — and the changed demographic situation.
Despite the decisive and beneficial presence of immigrants this last will inevitably lead to an increased number of users and a fall in the number of those paying for costs.
It is no wonder that health care is the area of welfare due for the greatest increase in spending in the coming decades, both in absolute terms and in proportion to GDP. This increase will lead the cost of health care to greatly exceed that of pensions. It is certain to be a very large increase, though how large is difficult and controversial to assess. Estimates vary between a minimum of 2-4 % as a proportion of GDP provided by Ecofin to 2060, and a maximum of 9.4 % established by OECD in 2050 taking into account factors other than simple demographics. This would lead to more than doubling current levels. That is the total expenditure: a stabilisation of the current public health care expenditure as a proportion of the Italian GDP at current levels would lead at least to a transition from the current coverage of 75 % of total health care expenditure to less than 50 %2 (that is, less than the contribution of the public expenditure on total health costs in the United States before the coming into force of the Obama reform3).
Furthermore, in these conditions investing in research will become increasingly difficult also for those European countries that, unlike Italy, have not yet totally given up, even though health care is bound to become one of the most important sectors in international economic competition over the coming decades.
These reasons already make it increasingly difficult to keep the promise of providing effective and timely universal coverage of actual health care needs, as established by the European social model, a promise that is now considered part of the very constitutional covenant. This is obviously also due to the impossibility of increasing spending limitlessly, as that would imply unsustainably ever-increasing taxation. Since that is impossible within an international context of open markets, the system’s economic sustainability is increasingly conditioned by its efficiency and by a clear definition of precisely what services it is necessary and fair to ensure to everybody.
The current party-political and monopolistic management of the Italian health care system is successful in strengthening the takeover of politics over society and in protecting the media image of its political managers. Structurally, however, it is much less concerned with, and greatly lacking in, economic efficiency or in the ability to effectively guarantee in timely fashion the services it is supposed to guarantee. This results in an effort to curb spending that is mainly achieved through a creeping cutting down of services, which in Italy is, for the most part, not even acknowledged. These cuts do not only consist in restricting services to the currently legally guaranteed basic level of care (“livelli essenziali di assistenza”). Rather, they are implemented by effectively making guaranteed services inaccessible due to long waiting lists, and often through an unstated attempt to restrict these services to those less able to demand them. This can actually happen because they do not have the financial or cultural means needed to understand that they can demand these services, how to do so or what degree of individual freedom of choice exists. Such freedom is often guaranteed by law, but often its practice is not recommended by those with far greater competence than the users, but who do not always share their interests and priorities.
Almost everywhere in Italy (though with significant differences among the various regional and local situations) regional governments and managers of the Local Health Authorities (ASL, “azienda sanitaria locale”) in whose hands lies the direct political management of the Italian health care system, have proved unable to withstand widespread electoral, territorial, religious, patronage related and vested interests pressure. In some extreme cases this pressure has been even downright criminal or linked to local mafias.
As a result there has been an inevitable and immeasurable waste of taxpayers’ money.
Health care expenditure represents about 80 % of the budget of Italian regional governments and thus constitutes the core of their power. It is precisely the particular complexity of this matter, and hence its inevitable opacity in the eyes of the public and the electorate, the difficulty in understanding policy choices and evaluating their effectiveness, adequacy and efficiency that makes particularly abstract (or sinisterly concrete when viewed from the perspective of the political class and its interests) the almost unanimous, enthusiasm of all the major parties in recent years for the introduction of “fiscal federalism” on a regional basis.
It is a pitiful lie, repeated since ordinary regional governments were established in the early Seventies in accordance with the constitutional provision, but with a delay of more than twenty years, that political power is much more accountable to the people if geographically close to them. The proximity of politics does not depend on physical distance but on the media. And the most powerful and influential media are those structured at the geographic level most useful to politics and allowed by the collection of advertising. In the Italian case the area of diffusion of the Italian language is still a better advertising medium than local dialects (despite the claims of localist and separatist movements). Indeed the most influential and decisive among the Italian national media — especially television, which is the main channel of political information for 80 % of Italian voters — are nowadays little more than protrusions of the political system. Although mostly respectful and loyal to their political patrons, they are still obliged to provide a minimum of information. Thus the national political establishment is still obliged to put up with a minimal degree of visibility that, in some marginal niches at least, is not always totally idolising and submissive.
This is not generally the case with regional power. Regional administrations are the most powerful channel of redistribution of taxpayers’ money. In fact removed from real and widespread democratic control such redistribution of resources consequently tends to operate in a manner contrary to constitutional provisions, reinforcing, as it does, widespread political patronage rather than a compliance with the virtuous and equitable redistribution criteria established by the 1948 constitution. If many Italians are at least informed about their political rulers at a national level, very few of those who have no vested interests or are not members of pressure groups even remember the name of any important regional politician, apart perhaps from that of the president of their own region (or those of corrupt politicians undergoing criminal investigation). On the other hand, in a country where their city identity is always important to people, municipal politics are still capable of arousing some genuine interest.
That’s why regional elections are always, much more than municipal ones, a mere test of the national political balance of power. An increasingly painful test of that mystery that Italian politics appears to be, if one sees it as does the rest of the Western world instead of through the filter of its reassuring Italian television representation.
Probably only those involved for professional and personal reasons and those belonging to vested interest and pressure groups cast their vote based on an informed assessment of health care policies and spending, the core of a regional administrations’ power.
It may appear even intolerable in these circumstances, and in the face of dramatic territorial imbalances which are not only persistent but also growing, to limit each individual to the opportunities for health care determined in each region as the consequences of electoral choices made in such a manner by the majority of their fellow citizens. There is no connection with the actual responsibilities of regional politicians. There is just the result of exchanges of favours, subdued media and public representations by contenders often completely divorced from reality and imposed, usually by national political parties’ headquarters with the advertising techniques of commercial marketing. Or at least that limitation might seem unfair and inappropriate, if only there were viable alternative ways of guaranteeing everybody adequate health care opportunities.
This is not to deny that, as indeed is obvious, there are significant individual and even frequent exceptions, due to the personal and unusual dedication of individuals capable of cultivating more demanding standards of fairness. Such exceptions are never entirely absent, at any level, among politicians and civil servants, not even in situations of increased decline. And there is no doubt that these unusually correct behaviours are even more frequent among health care workers, as might naturally be expected, in a sector very often entered into, at least initially, on the basis of strong vocational motivation. It is often the case, however, particularly among those who actually work from a strong and persistent vocational motivation, that the perception of the problem of economic choices in health care as a complex issue of public ethics is at the least very vague.
In order to counterbalance the physiological tendency of politicians to make irrationally expensive economic choices, in recent years frequent attempts were made to artificially re-create mechanisms similar to that of profit in the private sector. These were created for managers of Local Health Authorities or at times even for general practitioners guaranteeing them performance bonuses, based only, or primarily, on curbing expenditure. Not surprisingly, that provided further incentive for a non-declared reduction in health care services, exclusively damaging citizens incapable of defending themselves.
In some regions, health care costs have spiralled totally out of control, bringing regional governments to the brink of bankruptcy. These situations were saved by the arrival of inevitable rescue packages from the state, bound to reappear in election times, especially after the most severe stage of the global crisis is over, and if elections results are uncertain. It will be interesting to see how these rescue packages, usually also delivered to the advantage of friendly municipal administrations, will be justified in the near future by the advocates of “fiscal federalism”. The general public, however, with no direct vested interest involvement, will not even become aware of this. In the same way almost no Italian, for example, is aware of the repeated lavish state rescue packages for the city administration of Catania, graciously delivered, at the expense of all the country’s taxpayers, by the present allegedly “free market and federalist” national government to their incumbent Sicilian friends who had caused the bankruptcy.
Keeping open unreasonably small hospitals and wards, or those in irrecoverable condition, very expensive investments started and never completed and entire new public hospitals nearly finished but never opened or not even complying with legal requirements and in the meantime made unusable due to neglect and decay, patronising political recruitment of personnel, the creation of pointless hospital wards and management offices, the multiplication of bureaucracies, favouritism towards political clients and interference in the correct economic management of public health services — and even private ones operating within the national health service — are present almost everywhere, although in very diverse measure in different geographical areas, and are rather the rule than the exception.
But often health care political management turns out to be, as has increasingly been brought to light by criminal investigations, the preferred channel for illegal financing of political parties and politicians. This is also the case for the improper and often illegal exchange of favours among politicians, entrepreneurial groups able to use politics to obtain illegal competitive advantage, religious, political-religious or para-religious Catholic organisations and the media system. One would need to be naive, to say the least, for example, not to see how the segments of the public or private health care system that are an organic part of the political cartels that manage health care, or are available to act as such, can benefit from a much better treatment than that reserved for public and private operators who only want to stay focused on providing health care services.
And it is impossible to ignore that this reality is the inevitable consequence of the monopolistic party-political management of the health care market by a political establishment that, particularly in recent decades, has fallen below any possible Western public ethics standard. In truth this has not caused too many jolts to Italian public opinion used, as it is to this situation and stultified as it also is by popular media. The latter largely serves the interests of politics and its masters, and public opinion is led to a great extent to connive with a political class with which it increasingly shares ethical standards that for some time have no longer been those of the West.
In these conditions, the basic monopoly for managing and / or buying health care services guaranteed to citizens, currently the responsibility of representatives of the political system in the regions and in the Local Health Authorities, is a fundamental element in the web of power involving politics, business, bureaucracy, the media, the unions, the Catholic church and other vested interest groups that, in reducing its polyarchic character, make Italian society the least “open” in Western Europe.
There is indeed a specific, or at least especially Italian facet in the debate on health care political management, that, in Italy or in any country marked by similar widespread corruption and political mismanagement, cannot be seen as secondary or insignificant. There is a reassuring image that is proposed for internal propaganda by the most influential media, almost all interwoven, driven or directly owned by politicians, beginning with television, during these years of deep and growing civil barbarisation. Despite this image, however, when it comes to public ethics and institutional decay Italy has been a country in free fall. In the ranking of corruption drawn up annually by Transparency International, it has now been propelled to 63rd place (worse than Malaysia and Namibia). It also fell to 49th place (worse than Jamaica and Ghana) in the ranking, annually produced by Reporters sans Frontières, that measures media freedom and independence, and with it the opportunity for widespread citizens’ scrutiny of politics and its use of public resources.
It is at least grossly naive in these circumstances to even consider ensuring effectiveness and appropriateness of guaranteed services, efficiency and wisdom in expenditure, fairness, transparency and priority of public interests. Such a consideration would be impossible while at the same time leaving in the hands of regional politicians — a political class even more unfit than the central one (apart from, it is always useful to repeat, the usual individual exceptions), and widely controlled by only minimally independent and authoritative media — the direct or indirect power to make top medical and managerial appointments, to drive recruitment out of a widespread system of patronage, to grant or deny accreditation and agreements to private health care providers (which are bound to be permanently dependent on the same political system as their almost unique customer and counterpart), to distribute billion sum contracts, to handle a total annual expenditure of around 110 billion Euros and to control its correctness largely by themselves. These same regional politicians would have to undertake a myriad of actual and specific decisions, largely discretionary, and, due to their technical nature, not liable to extensive and widespread democratic public control. In order to monitor and evaluate the fairness and effectiveness of such a huge expenditure it would be necessary, if possible and economically viable, to hire legions of genuinely politically independent high-profile professional auditors and inspectors, all upright and incorruptible, and with broad multidisciplinary and multi-specialty expertise in the medical, pharmaceutical, bioengineering, economic, logistical, legal, administrative and sociological fields.
Even the strongest supporters of an entirely public health care system generally acknowledge — indeed, are often the first to recognise and denounce5 — the weight of corruption, waste, mismanagement, and connections among politics, business, the media and religious powers, and in some regions at times even criminal ones. Yet they persist in believing that this could all be rectified while keeping such decision making and spending power more or less directly in the hands of public power, that is (in the end, at least and at best) of politicians6. In today’s Italy (and in the context of cultural and civic decline devoid of antibodies in which two generations of future leaders have already been forming) there is unfortunately no historical or political sense in expecting a general or at least a prevailing honesty and fairness from this political class. Nor does it make sense to request that “political parties”, but not “politics” step aside, almost as if political parties were the leading players in misappropriation because of their supposed inherent monstrous and impersonal wickedness, rather than it being the result of the will and activity of those real individuals, regional politicians, their increasingly cross-party de facto connections, their national leaders, their representatives, trustees and clients, elected and appointed in the twenty regional administrations, in the 185 ASL and in the 95 local administrative bodies that run public hospitals.
And it is even more grossly naive to trust in the effectiveness of democratic control by an inevitably incompetent, careless, uninformed electorate, one that is systematically duped by a media apparatus largely subservient to politicians. Even when minor, less influential but truly independent media are involved, they in turn are easily misled by the most diverse and unsuspected organisations or vested interest groups.
Reform proposals that do not take into account the prevailing state of public ethics, widespread corruption or even just the frequent favouritism involved in administrative discretion, demonstrate, first and foremost, no sense of reality. The same applies to those that do not take into account the consequences of the legitimate volatility (often fatuity) of the choices of political majorities, which denies those health care market operators not organically linked to local political-administrative networks any serious planning opportunity — a condition vital for the efficient operation of the system. Nor yet are those reform proposals realistic that do not take into due account the physiological economic inefficiency, slowness and lack of responsiveness of the public administrative machine, or do not take account of the information asymmetries, inevitably huge in this area, and the consequent and structural perceptive distortion they lead to, preventing effective public and widespread democratic control. All the proposals, in short, that ultimately depend on the will and capacity for self-reform of the current Italian political establishment.
The objection suggesting that, since health care is a primary need, the sector deserves a set of rules capable of relieving it from subjection to the “logic of profit” has in itself only the value of a rhetorical statement. Food also is a primary need, but removing the production and distribution of food from the “logic of profit”, where it was attempted, did not result in a better satisfaction of food needs. And the demand to purely and simply exclude health care from the market and from free economic enterprise means entrusting one of the key sectors of global competition and economic, scientific and technological development to one of the worst political classes in today’s Europe: with the obvious consequence of being largely marginalised internationally and forcing further brain drain.

1 An overall rather sympathetic and comparative description of the Italian health care system in Nerina Dirindin, Paolo Vineis, Elementi di economia sanitaria, Bologna, Il Mulino, 1999. A fundamental defence of the existing system in Rosy Bindi, La salute impaziente. Un bene pubblico e un diritto di ciascuno, Milano, Jaca Book, 2004 (the author is a former health minister). A more critical approach in Erminio D’Annunzio, Sanità malata, Roma, Castelvecchi, 2010 (the author is a former member, responsible for health care, of the regional government of Abruzzo). Franca Maino, La politica sanitaria, Bologna, Il Mulino, 2001. A historical perspective in Saverio Luzzi, Salute e sanità nell’Italia repubblicana, Roma, Donzelli, 2004.
2 Fabio Pammolli, La sanità in Italia: sostenibilità dei conti pubblici e nuovi assetti istituzionali, in Le riforme che mancano. Trentaquattro proposte per il welfare del futuro, a cura di Carlo Dell’Aringa e Tiziano Treu, Arel, Bologna, Il Mulino, 2009.
3 Nerina Dirindin, Paolo Vineis, 1999, p.87.
5 Paolo Cornaglia-Ferraris, Eugenio Picano, Malati di spreco. Il paradosso della sanità italiana, Roma-Bari, Laterza, 2004. Rapporto sullo Stato sociale 2006. Welfare state e crescita economica, edited by Roberto Pizzuti, Novara, De Agostini Utet 2006, p 214 fol.
6 Ivan Cavicchi, La privatizzazione silenziosa della sanità. Cronache sul razionamento del diritto alla salute, Datanews, Roma, 2003. Id., Il pensiero debole della sanità, Bari, Dedalo, 2008.

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